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US Senate report: E-Rate school internet subsidy pays $200–400 million a year in consulting fees
A Senate Commerce Committee report says consultants helping schools and libraries apply for E-Rate subsidies collect $200–400 million annually; it urges pausing the program's expansion until flaws are fixed.
Why it matters
E-Rate is the FCC's roughly $3-billion-a-year subsidy program funding internet access for schools and libraries; the share going to consultants has raised congressional questions about efficiency.
Full report
The Senate Commerce Committee report, released October 13 under Chairman Ted Cruz, says consulting firms collect $200 million to $400 million per year, with some charging a single school district more than $100,000 a year. Milwaukee Public Schools, in E-Rate for over 20 years with more than $115 million received, still pays over $250,000 a year in consulting fees. Cruz said consultants help applicants navigate "a bureaucratic morass"; the report notes limited industry regulation and cites several E-Rate fraud criminal cases.
The report recommends the FCC mandate disclosure of E-Rate-related consulting compensation and halt E-Rate expansion until the flaws are addressed. Background: FCC Chairman Brendan Carr announced a full review of E-Rate in June, not ruling out reform or termination. The districts and the FCC did not immediately comment.
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